Applegreen, Butlers and Insomnia lobby hard against plan for 20c tax on takeaway coffee cups

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A COALITION OF service stations, fast food restaurants, café chains and shops is lobbying hard against the latest government plans for a levy on disposable cups.

Applegreen, Bewley’s, Butlers Chocolates, McDonald’s, Insomnia, Supermac’s and Maxol are among the firms that have come together to push back against the government’s attempt to impose a levy on takeaway cups.

The companies, together with packaging firms and industry groups representing convenience stores, have made numerous submissions to the Department of the Environment in recent months calling for the promised measure to be scrapped.

Ireland discards approximately 22,000 disposable takeaway cups every hour, according to the government. Disposable cups are typically made from paper with a plastic coating and are therefore difficult to recycle. They are among the most prevalent forms of litter in Ireland.

The aim of taxing them would be to drive behavioural change by consumers, who would be incentivised to bring their own reusable cup, or sit in to have a tea or coffee.

The government has abandoned the previous government’s 2022 pledge to directly charge consumers a so-called latte levy at the till as an incentive to switch to reusable cups. Since last year, civil servants have been working on a new plan for Revenue to collect the tax directly from producers or importers of disposable cups.

The companies lobbying against the measure - who have come together as the Irish Paper Packaging Circularity Alliance (IPPCA) – have claimed that levying 20c on the cup producers would add 29c to the price of a cup of coffee, which would “ultimately be passed on to consumers”.

This would eat into the savings made by hospitality businesses through the VAT cut that kicked in last month, the companies said in a letter in February to Alan Dillon, the junior minister at the Department of Enterprise who is responsible for the issue.

The companies did not explain where the 29c figure came from in their letter, which was released under Freedom of Information.

In a submission to the Department of the Environment in April, after meeting with officials, the coalition of companies opposed to the latte levy argued the proposed upstream tax would fail to incentivise behavioural change by consumers. However, they also opposed the original ideal of a levy directly on consumers.

The IPPCA companies claimed that ”independent research” in 2023 had indicated that the introduction of any levy would cause cafés’ revenue to decline by 19-23%. This research was commissioned by the companies themselves.

The IPPCA companies told officials in April that the collapse of a high-profile reusable cup scheme in Killarney had showed “the ineffectiveness of such schemes, even when customer incentives exist”. Fifty local businesses in Killarney had come together in 2023 and agreed not to offer takeaway cups and instead offer reusable ones for a €2 deposit.

Contrary to the IPPCA’s suggestion, local businesses withdrew last year from the Killarney scheme as a result of the government’s u-turn on the 20c latte levy.

The IPPCA is advocating for a move to paper cup collection and recycling.

It has organised a pilot cup collection scheme in leafy Ranelagh in south Dublin in collaboration with Dublin City Council, and wants the government to roll this out nationwide in lieu of introducing a levy.

Consumers can dispose of paper coffee cups at special “cup collection units” in four businesses in Ranelagh, Supervalu, Spar, Butlers and Urban Health café.

The IPPCA has repeatedly requested meetings with the minister to discuss the latte levy. Internal correspondence shows that Department of Environment officials advised the minister in January not to meet with the group until the regulatory impact assessment on the new latte levy plan was finalised.

The government is under pressure from Brussels to do more to tackle single-use plastics, with the European Commission initiating infringement proceedings against the State in April.

Irish Businesses Against Litter, which carries out regular litter surveys nationwide, has condemned the government’s prevarication on the latte levy and warned that without state intervention coffee cups will remain an “entirely unnecessary” blight on the Irish landscape.

Surveys conducted by the Environmental Protection Agency between 2019 and 2021 indicated strong support for policies to reduce consumption of single use plastic, with 64% supporting levies at point of sale.

The Department of Environment said this weekend that it is still considering the “next policy steps” to tackle Ireland’s throwaway cup habit, and indicated this could take a number of months.

Dillon, the minister, told The Journal in June that he wants to encourage the roll-out of “washing stations” in garages and large coffee chains to facilitate more widespread use of reusable cups.

The Department of Environment said the government has installed more public drinking water fountains and given the Environmental Protection Agency more resources to enforce bans on certain single-use plastic products.

The IPPCA has been contacted for comment.

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